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Sunday, March 27, 2011

For 20 years, a married couple kept a joint investment account with a well-known brokerage firm. In addition to their investment portfolio, there were liquid funds in a checking account each could use for expenses. They didn't use this checking account as their primary checking account, but each from time to time wrote a check on the investment account for major expenses.

Earlier this year, however, the wife discovered that her husband had been regularly writing checks made out to "cash" for thousands of dollars. During a 10-year period, her husband wrote checks for more than $350,000 made out to "cash."

The husband admitted that he used a significant portion of the funds to go to strip clubs. "He was pretending to go to work every day, when in fact he was either driving around waiting for the strip clubs to open, or spending the day in the clubs," his now ex-wife writes.

The couple divorced in June.

You might guess that my reader's question might have to do with the ethics of a husband who spends joint funds on such endeavors. It's not.

"Did our financial adviser have an ethical obligation to advise me about this activity?" she wants to know.

The couple only met with their financial adviser -- the broker for their investment account -- once a year.

Since her discovery, the wife decided to change brokers. When her former broker asked her why, she told him that she felt he should have given her a heads up about all the checks made out to "cash." She says that even a comment from him that they might want to restructure their investments to accommodate their new spending pattern would have sufficed. His response, she writes, was simply to say, "Oh."

My reader has every right to be furious with her ex-husband for spending their joint account funds on personal expenses about which she apparently had no knowledge.

But her beef is with her ex-husband, not her ex-broker. Unless he gave them advice that went against their instructions or if he failed to make note that they were living beyond their means when he assisted then in creating a financial plan, it was not his business to keep tabs on what they were using their checking account for.

The checks her husband wrote were written over a decade. Both of their names were on the account and each had access to the funds. That her husband used the money for a purpose his wife found objectionable is clear, but that's an issue between the two of them.

It's unfortunate that no red flags arose for my reader during the time her husband was spending their money on his extracurricular activities. But in a relationship presumably built on trust, it's not unusual that she would not have suspected such behavior.

The right thing is for my reader to cast responsibility for her husband's behavior squarely on his shoulders.

Sunday, March 20, 2011

A reader just outside of Boston and his wife recently became parents for the first time. To help make sure they remain stocked with goods they need for their new baby, the couple has a standing order for diapers with Amazon.com. They use the site for a number of other purchases, as well.

Recently, my reader’s wife ordered a new sheet for their baby’s bed and two sippy cups. A few days later they received two boxes, each with a bedsheet and a two-pack of sippy cups in it.

“Our initial thought was that my wife had probably double-clicked on her order, but in checking we found that it was probably an Amazon error,” my reader writes. Their credit card was only charged once, and the invoice slip in each box carried the exact same order number. Amazon seems to have filled their order twice, but charged them only once.

My reader tells me that while he was all for keeping both orders, his wife was more concerned with doing what was right. They agreed that it was probably right to let Amazon know about the mistake and ask for the company to send a mailing label so they could return one of the orders.

His wife agreed, but she was still upset about an earlier flap they had had with their standing diaper order. Amazon had shipped the wrong size diapers and it took several e-mails to get the issue sorted out. When the correct shipment finally arrived the couple sent back the incorrect shipment. A few weeks later they got an e-mail from Amazon claiming it hadn’t received the returned diapers and was therefore going to re-charge their credit card for the amount.

Before his wife had time to deal with this charge error, the double order mistake occurred.

Because the prices of the bed sheet and cups and the shipment of wrong-size diapers were about the same, my reader’s wife wants “to call it a wash.”

The impulse to assume all’s even because the value of the wrongly shipped goods and wrongly charged goods are roughly equal makes sense. But strictly speaking, that doesn’t resolve the issue.

For one, Amazon still wrongly charged the couple and should know about it. What’s more, the couple received goods for which they didn’t pay and they should let Amazon know that.

Just as it wouldn’t be kosher to not report income on income tax forms because you hadn’t taken an equivalent amount of deductions, it’s not OK to assume that the two wrongs with Amazon equal out. (Granted, Amazon doesn’t have the foreboding power of the IRS.)

The right thing would be for my reader or his wife to contact Amazon to let it know of the error and to ask the company if they can just keep the wrong shipped goods to make up for the error, if that’s what the couple would like to do. They could also use this opportunity to let Amazon know that if the error isn’t resolved swiftly that they will consider dropping their standing order with the company. (The little publicized toll-free customer service number at Amazon is 800-201-7575.)

By doing this, the couple not only does what’s right by acknowledging they received goods for which they didn’t pay, they also put Amazon on notice that if the company can’t get the order and charging straight, it will lose a valued customer.

Sunday, March 13, 2011

When England’s Prince William proposed to Kate Middleton, he used the blue sapphire and diamond ring that had belonged to his mother, Princess Diana. The cost of that ring originally ran around 30,000 pounds.

It didn’t take long for those inspired by the ring to put a less-costly knockoff on their or their intended’s finger.

Almost immediately after the engagement was announced, a manufacturer in China began replicating the ring and selling it online for under 20 bucks. Of course, the replica doesn’t contain sapphires or diamonds. And the band on the finer versions of the replica is made of silver-coated copper. But still, for those who loved the design of the ring, it’s relatively cheap to put their fingers on one.

Few soon-to-be engaged couples are likely to find a Kate Middleton knockoff ring to be the jewelry that seals their marriage deal. But many might be inspired by the look of a ring they happen to see and like that is either too costly or not the just-right design.

When a reader and her fiance were shopping for engagement rings at a shopping mall, they found a setting they liked by an artist. It wasn’t, however, exactly what they were looking for. “We wanted a metal at a different price point,” my reader writes, “and we wanted a setting that would accommodate a different shape of stone.”

The couple didn’t know the name of the artist who designed the ring. “It didn’t occur to us at the time to try harder to find who he was” so he could do a custom design. Instead, they used his setting design as an inspiration, then made the changes they wanted and commissioed a local jeweler to make the ring for them.

Later, when she thought more about it, my reader began to feel badly about using the artist’s design as a jumping-off point for her engagement ring and having someone else make it. So she went back to the store in the shopping mall to see if the original setting was still there so she could try to find out who the artist was “to perhaps buy something else from him to make karmic amends.”

Alas, the ring was no longer for sale and neither was anything else from the artist.

“I feel solidly that it was not the ethical thing for us to do,” my reader writes, “and I would not do it again if I had a chance.” She asks: “Is there a point at which using an artist's design as ‘inspiration’ is OK, or is it just stealing?”

My reader is being too hard on herself. Sure, it would have been nice if she had tried to contact the artist whose design she originally liked to see if he might be able to design something inspired by that design but more to her liking.

But unless she and her fiance replicated the design exactly, no harm, no foul. Finding inspiration in a piece of art is far different from commissioning someone to make a cheaper exact knockoff of the original.

The right thing is for my reader and her husband to enjoy their rings and the design they came up with to reflect their new life together. If that shopping mall store ever does get in more jewelry from that original artist, good on them if they choose to buy a little something from him to reward him for inspiring them.

Thursday, March 10, 2011

About a year ago, a reader from Boston who is a freelance consultant started doing work for a new client. The client sent her a contract, part of which has the consultant agree that the client will be her only client for the duration of the contract. The contract is renewable every three months.

In a face-to-face meeting when they were first talking about doing business together, my reader told her client that she would not be giving up her regular existing clients, but the new client put the exclusivity clause in the contract anyway.

My reader signed the contract even though she knew she already had several other clients for whom she planned to continue doing work.

“They don’t have room to complain because I deliver all of their work on time and they like what I give them,” my reader tells me. “I wasn’t willing to let go of long-term clients whose work is intermittent but regular.”

My reader acknowledges that her workload gets “crazy at times,” but she always gives this contracted client priority. “They ask a lot of me,” she says. “It’s nice getting a regular monthly paycheck, but it’s not enough to warrant dropping my other clients.”

All has been going well between my reader and her client over the past year. No questions have come up about my reader’s other clients.

But now the CEO of her client company wants to connect on LinkedIn, a business-oriented social networking site. Many LinkedIn members list their work experience and current work projects. My reader’s LinkedIn page includes copious details about her extensive body of current work.

In a perfect world, listing professional relationships on a site like LinkedIn could be a boon to someone’s business. Such listings can let the world of prospective clients know how highly your work is in demand.

But my reader now finds herself worried about what her client will learn when she sees her page.

“She’s going to see all of my present clients and work I do, which is a lot!” my reader says.

Still, she says she’s going to accept her client’s request on LinkedIn, but not say anything and just see what happens.

It’s a worry that didn’t need to happen.

My reader did the right thing by telling her client right off the bat that she had existing clients with whom she planned to continue working. But by not requesting that her contract be corrected to reflect this by excising the exclusivity clause, she now finds herself in a predicament. By signing the contract, she agreed to something she knew did not accurately reflect what she planned to do.

Since the contract comes up for renewal every three months, the right thing would be to make sure that the language in it is corrected to reflect her work reality. She’d be wise also to try to rectify this before she agrees to link up with her client on LinkedIn because it would be better for my reader to clear the air before her client discovers that the agreement she thought she had with my reader does not reflect reality.

Jeffrey Seglin writes "The Right Thing," a syndicated weekly ethics column distributed by Tribune Media. From 2004 to 2010, the column was distributed by The New York Times Syndicate. From 1998 to 2004, he wrote a monthly ethics column of the same name for The Sunday New York Times business section.

He is a senior lecturer of public policy and director of the communications program at Harvard's Kennedy School. He was an associate professor at Emerson College in Boston where he taught writing and ethics from 1999 until 2011.